Types of Homeowners Policies

A homeowners insurance policy includes up to six tiers of coverage: the home structure and its interior fixtures; detached structures such as garages; personal property; loss of use (repayment for additional living expenses incurred when a primary residence is uninhabitable); liability and property damage for others' property or person; and medical payment coverage for people injured on your property. Evaluating a policy requires you to consider your risks and strategize the best coverage for the lowest price.

HO-1

The most basic type of homeowner's insurance is called HO-1. The policy generally covers damage and loss of property caused by an aircraft, explosion, fire, glass or safety glazing materials, hail, lightning, riot, smoke, theft, vandalism, vehicle or volcanic eruption. The policy also includes a liability portion that covers costs related to damage of property of others and medical expenses of persons injured on your property. Some policies may cover loss-of-use costs.

HO-2

HO-2 coverage includes all the coverage of a HO-1 policy plus property damage or loss caused by electrical surges, falling objects, water from home appliances or utilities, and weight of ice, sleet or snow. Water damage coverage includes accidents caused by plumbing system flooding or freezing and the rupture of heating systems and water heaters.

HO-3

The most commonly sold homeowners coverage is the HO-3 policy. This extended insurance policy covers all the causes for damage in the HO-1 and HO-2 policies, plus other causes not specifically excluded in the policy language. Typical exclusions include earthquake, flood, nuclear accidents and war. Homeowners who want additional coverage may purchase a HO-15 endorsement, called a special personal property endorsement, which changes the coverage limits for personal property from named perils -- covering specified causes only -- to an open-peril policy that pays for all losses except when specifically excluded.

HO-6

The HO-6 policy is for homeowners in condominiums. The policy covers your personal items and your condominium's interior when damage or loss occurs because of aircraft, civil disturbance, explosion, falling objects, fire, hail, lightning, smoke, theft, vandalism, vehicle or wind storm. Changes in 2009 to FHA and Fannie Mae lending requirements mandate that condominium owners who borrow under either program maintain a HO-6 policy. Some policies cover improvements and upgrades done to the condominium. Your HO-6 policy may include gap coverage to protect you from unplanned assessments, for example when a condominium association's bylaws hold owners responsible for association improvements by passing along the costs to them.

HO-8

Owners of older homes whose replacement value exceeds its actual market value would buy an HO-8 homeowner's policy. This insurance provides basic coverage similar to the HO-1 policy, but it only covers the cost of repairs or actual cash value and will not pay for rebuilding costs. This type of insurance coverage is meant for owners whose homes have architectural or historic value that would make their re-creation significantly high.

About the Author

Tricia Chaves began her writing career after working in advertising and promotions for entertainment publisher "The New Times." In 2005, she earned her real-estate salesperson license from the state of Ohio and certification for leasing and property management from the Northeast Ohio Apartment Association. She was certified as a life and weight-loss coach and master practitioner of neuro-linguistic programming in 2011.